ACFE Insights

LETTER FROM THE PRESIDENT

Bruce Dorris, J.D., CFE, CPAACFE President and CEO

We all know this well-worn concept: An organization’s reputation takes years to develop, but it can collapse overnight if it didn’t originally possess integrity from the top down. “It took 160 years for Siemens to build a reputation and only five minutes to ruin it,” said Dr. Andreas Pohlmann, the former chief compliance officer of Siemens, at the 29th Annual ACFE Global Fraud Conference in June. A little ill-gotten profit means nothing if a business has to close its bank accounts when it goes belly up.

Ironically, many defunct companies had robust codes of conduct at the same time they were committing occupational fraud and abuse. Yet some organizations are still willing to risk fines and penalties rather than commit to integrity agendas.

Fraud examiners have implemented codes of conduct and compliance programs for decades in their organizations and agencies. Management challenges them to measure the returns on those programs and add an adjective like “integrity” to a list of potential fraud risks. But the overarching question is, “Are our people doing the right things at the right times for the right reasons?”

So, how do we effectively measure integrity? In Fraud Magazine's recent cover article, the interviewees answer that question and give four foundational elements for evaluating an organization’s integrity agenda: governance, culture, controls and procedures, and data-based insights. Constant communication among all departments is critical, the interviewees say. After an organization finds fraud, management often laments “if only I had known” what was going on with that employee, that division, that factory.

What can organizations do to make sure their staffs have the right training and communication channels to deal with their unique ethical dilemmas? The article’s framework gives fraud examiners more than just guidelines; it supplies how-to methods.

Practicality has been our hallmark since our origins 30 years ago. ACFE founder and Chairman Dr. Joseph T. Wells, CFE, CPA, has always stressed that ACFE materials and training provide more than just theory about reducing fraud but give practical takeaways for CFEs and their organizations to use immediately.

A company might have some of the best internal controls, but unless it implements them, properly trains its employees and follows through with its integrity agenda, then its value is diminished. Organizations that imploded because of fraud might have claimed to have integrity, but mere printed documents don’t contribute to appreciable change.